TMI Blog2021 (12) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... y scheme. The I B Code has been enacted to speed up Insolvency Resolution Process and there is a timeline fixed for different steps filing Appeal within 30 days to the Appellate Tribunal is also part of the same thread of timeline which run through different provisions of the I B Code . Rule 50 is contained in Chapter IV which deals with the procedure and Rule 50 is a part of procedural law which oblige the Registry to send free of cost copy. However, the scheme of limitation for filing Appeal as delineated by Section 61 does not give any scope to the submission that limitation to file an Appeal under Section 61 shall not begin till free of cost copy under Rule 50 is received by a party. The provisions of the Limitation Act are applicable to the I B Code proceedings which is well settled and is no longer debatable after insertion of Section 238A in I B Code . Section 12 of the Limitation Act provides for period which can be excluded in period of limitation. In the present case, the case of the Appellant is that he applied certified copy of the order twice firstly on 21.01.2019 and secondly on 29.07.2021. Applying the ratio of the judgment of the Sagufa Ahmed [2020 (9) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was applied on 27.07.2021 and received on 29.07.2021 and the Appeal was filed within time from the said date. Learned Counsel advances his submission that the Appeal is within time and he is also relying on Rule 50 of the NCLT Rules, 2016. 2. We have heard Learned Counsel for the Appellant on the question of limitation. order reserved. 3. Learned Counsel for the Appellant is permitted to submit a short brief note within three days only on the question of limitation of the Appeal along with the judgments on which reliance is being placed by the Appellant. 4. Learned Counsel for the Appellant has also submitted Written Submissions on 23.11.2021 which has also been looked into. 5. The only question to be decided at present is as to whether the Appeals filed by the Appellant are within time or they are barred by limitation. 6. Shri Shyam Babu, Learned Counsel for the Appellant submitted that the Appellant came to know about the impugned order only in second week of December 2018. He submits that he has applied for the certified copy of the judgment on 27.07.2021 which copy was ready and delivered to him on 29.07.2021. Appeals having been filed on 20.09.2021, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Learned Counsel for the Appellant and written submissions on record, we formulate following two questions to be answered in these Appeals:- (i) Whether on the strength of judgment of the Hon ble Supreme Court in SMW(C) No. 3 of 2020, the Appellant is entitled for benefit of the said judgment and filing of Appeals on 20.09.2021 can be treated within time? (ii) Whether the Appeals filed by the Appellant are within limitation as per Section 61 of the I B Code ? 12. In the first question heavy reliance is placed on the order of the Hon ble Supreme Court dated 23.09.2021 as noted above. The Hon ble Supreme Court in the said order while disposing the Miscellaneous Application No. 665 of 2021 issued following directions:- 8. Therefore, we dispose of the M.A. No.665 of 2021 with the following directions: - I. In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 02.10.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 03.10.2021. II. In cases where the limitation would have expired during the period between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate Tribunal. (2) Every appeal under sub-section (1) shall be filed within thirty days before the National Company Law Appellate Tribunal: Provided that the National Company Law Appellate Tribunal may allow an appeal to be filed after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing the appeal but such period shall not exceed fifteen days. 15. We also need to notice the provisions of the Companies Act, 2013 which earlier governed the filing of the Appeal to the Appellate Tribunal. Section 421 (1) to (3) which are relevant are as follows:- 421. Appeal from orders of Tribunal.- (1) Any person aggrieved by an order of the Tribunal may prefer an appeal to the Appellate Tribunal. (2) No appeal shall lie to the Appellate Tribunal from an order made by the Tribunal with the consent of parties. (3) Every appeal under sub-section (1) shall be filed within a period of forty-five days from the date on which a copy of the order of the Tribunal is made available to the person aggrieved and shall be in such form, and accompanied by such fees, as may be prescribed: Provided that the Appellate Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 of the I B Code with Rule 50 of the NCLT Rules, it cannot be said that limitation in filing of an Appeal under Section 61 shall not begin to run unless free of cost copy is sent by Registry and received by a party. Section 61 came for consideration before the Hon ble Supreme Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited- (2018) 1 SCC 353 wherein in paragraph 35, the Hon ble Supreme Court held:- An appeal can then be filed to the Appellate Tribunal under Section 61 of the Act within 30 days of the order of the Adjudicating Authority with an extension of 15 further days and no more. 20. The limitation to file Appeal under Section 61 cannot be treated to be under suspension till free of cost copy is received by party as enjoined by Rule 50. Any such interpretation shall not dwell with the statutory scheme. The I B Code has been enacted to speed up Insolvency Resolution Process and there is a timeline fixed for different steps filing Appeal within 30 days to the Appellate Tribunal is also part of the same thread of timeline which run through different provisions of the I B Code . The Hon ble Supreme Court in Mobilox Innovations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation recorded was mandatory and High Court held that FIR has non est on the aforesaid ground. In an Appeal filed by the State, the Judgment of the High Court was reversed. In paragraph 22 the Hon ble Supreme Court laid down following:- 22. The law on this issue can be summarised that in order to declare a provision mandatory, the test to be applied is as to whether non-compliance with the provision could render entire proceedings invalid or not. Whether the provision is mandatory or directory, depends upon the intent of the legislature and not upon the language for which the intent is clothed. But the circumstance that the legislature has used the language of compulsive force is always of great relevance. If we apply this test to the provisions of Section 154 CrPC, we reach the inescapable conclusion that the provisions of Section 154(2) are merely directory and not mandatory as it prescribes only a duty to give the copy of the FIR. 23. Rule 50 as noted above is contained in Chapter IV which deals with the procedure and Rule 50 is a part of procedural law which oblige the Registry to send free of cost copy. However, the scheme of limitation for filing Appeal as delineat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled Rule of construction that statute has to be interpreted as it exists and addition of any word is not permissible. 25. There is one more aspect which needs to be noticed as noted above in written submissions. The Appellant has categorically stated that he came to know about the impugned order in second week of December 2018 and he applied for certified copy of the impugned order on 21.01.2019. According to his own case, he applied for certified copy of the impugned order on 21.01.2019. There is no explanation that after applying for certified copy on 21.01.2019 how he applied second time on 29.07.2021. 26. Now we come to the judgment of the Hon ble Supreme Court in Sagufa Ahmed Ors. (supra) on which reliance has been placed by the Learned Counsel for the Appellant. The Hon ble Supreme Court in the above judgment has referred to Sections 420, 421 of the Companies Act, 2013 as well as Rule 50 of the NCLT Rules, 2016. In the said case, the judgment of the NCLT was delivered on 25.10.2019 and the Appellant of that case has applied certified copy of the order on 21.11.2019 and he received the copy of the certified order on 19.12.2019. The Appeal was filed with Applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court that in view of Rule 50, free copy of the order is to be provided to the party and the clock of limitation under Section 61 would run from the date free copy is issued to a party. It was submitted before the Hon ble Supreme Court that Sagufa Ahmed s case (supra) covers the situation. The Hon ble Supreme Court considered the relevant provisions of the I B Code and the Rule 50 of the NCLT Rules, 2016 as well as the judgment of Sagufa Ahmed and has held that legislative scheme as delineated by Section 61 does not indicate that a party is to wait till free copy is delivered. The argument of the Appellant that limitation shall not start running till a free certified copy is supplied has been considered and rejected. The judgment of Sagufa Ahmed was taken note by the Hon ble Supreme Court in paragraph 14 which is to the following effect:- 14. In Sagufa Ahmed (supra) a three judge Bench of this Court dealt with the interpretation of Section 421(3) of the Companies Act and whether limitation would start running once a free certified copy is made available to the party, sans an application from the aggrieved party. It held, in the context of a winding up petition under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for filing an appeal against an order of the NCLT is governed by the statutory mandate of Section 420(3) of the Companies Act read with Rule 50 of the NCLT Rules, which enables a party to compute limitation from the date of receipt of the statutorily mandated free certified copy, without having to file its own application. However, the decision of this Court in Sagufa Ahmed (surpa) clarifies that the statutory mandate of a free copy is not to enable litigants to take two bites at the apple where they could compute limitation from either when the certified copy is received on the litigant s application or received as a free copy from the registry - whichever is later. 29. In paragraph 17 of the judgment, the Hon ble Supreme Court held that if an Appeal is necessary and expedient by an aggrieved party, it is expected to be filed forthwith Application for certified copy and not to wait for free copy. The omission of the words from the date on which the order is made available in Section 61 which was earlier there in Section 421 was held to be of significance which indicate the legislative intention. In paragraph 17 of the judgment, following was laid down:- 17. In this bac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with Rule 50 of the NCLT and prevent limitation from running. Accepting such a construction will upset the timely framework of the IBC. The litigant has to file its appeal within thirty days, which can be extended up to a period of fifteen days, and no more, upon showing sufficient cause. A sleight of interpretation of procedural rules cannot be used to defeat the substantive objective of a legislation that has an impact on the economic health of a nation. 31. In the present case, the case of the Appellant is that he applied certified copy of the order twice firstly on 21.01.2019 and secondly on 29.07.2021. Applying the ratio of the judgment of the Sagufa Ahmed , in the present case, at best Appellant can claim that period of limitation did not start running till he applied for certified copy of the order i.e. till 21.01.2019. The Appeals have been filed on the strength of certified copy of the judgment which was applied on 29.07.2021 which certified copy of the Application is claimed by the Appellant after more than three years of the delivery of the judgment whereas in Sagufa Ahmed s case certified copy of the judgment was applied within 27 days from the delivery of jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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